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Looking for an Investment Grade Bond - Intermediate fund? You may want to consider Principal Spectrum Preferred and Capital Securities Income A (PPSAX - Free Report) as a possible option. PPSAX has a Zacks Mutual Fund Rank of 3 (Hold), which is based on various forecasting factors like size, cost, and past performance.
Objective
PPSAX is one of many Investment Grade Bond - Intermediate funds to pick from. Investment Grade Bond - Intermediate funds focus on the middle part of the curve, generally with bonds that usually mature in more than three years but less than 15 years. Fixed income instruments with this maturity level usually have medium duration risk, but they also compensate investors with a modest yield, at least when compared to their short maturity counterparts. Additionally, the focus on investment grade will make funds here safer, but yields will be lower than in the junk bond category.
History of Fund/Manager
PPSAX is a part of the Principal Financial Group family of funds, a company based out of Des Moines, IA. Since Principal Spectrum Preferred and Capital Securities Income A made its debut in October of 2005, PPSAX has garnered more than $701.51 million in assets. The fund is currently managed by a team of investment professionals.
Performance
Investors naturally seek funds with strong performance. This fund carries a 5-year annualized total return of 2.8%, and is in the bottom third among its category peers. If you're interested in shorter time frames, do not dismiss looking at the fund's 3 -year annualized total return of -0.05%, which places it in the bottom third during this time-frame.
It is important to note that the product's returns may not reflect all its expenses. Any fees not reflected would lower the returns. Total returns do not reflect the fund's [%] sale charge. If sales charges were included, total returns would have been lower.
When looking at a fund's performance, it is also important to note the standard deviation of the returns. The lower the standard deviation, the less volatility the fund experiences. Over the past three years, PPSAX's standard deviation comes in at 7.9%, compared to the category average of 13.79%. The fund's standard deviation over the past 5 years is 9.27% compared to the category average of 14.91%. This makes the fund less volatile than its peers over the past half-decade.
This fund has a beta of 0.13, meaning that it is less volatile than a broad market index of fixed income securities. Taking this into account, PPSAX has a positive alpha of 2.72, which measures performance on a risk-adjusted basis.
Expenses
For investors, taking a closer look at cost-related metrics is key, since costs are increasingly important for mutual fund investing. Competition is heating up in this space, and a lower cost product will likely outperform its otherwise identical counterpart, all things being equal. In terms of fees, PPSAX is a load fund. It has an expense ratio of 1.05% compared to the category average of 0.97%. So, PPSAX is actually more expensive than its peers from a cost perspective.
This fund requires a minimum initial investment of $1,000, and each subsequent investment should be at least $100.
Fees charged by investment advisors have not been taken into considiration. Returns would be less if those were included.
Bottom Line
Overall, Principal Spectrum Preferred and Capital Securities Income A ( PPSAX ) has a neutral Zacks Mutual Fund rank, and in conjunction with its comparatively similar performance, better downside risk, and higher fees, this fund looks like a somewhat average choice for investors right now.
For additional information on the Investment Grade Bond - Intermediate area of the mutual fund world, make sure to check out www.zacks.com/funds/mutual-funds. There, you can see more about the ranking process, and dive even deeper into PPSAX too for additional information. And don't forget, Zacks has all of your needs covered on the equity side too! Make sure to check out Zacks.com for more information on our screening capabilities, Rank, and all our articles as well.
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Is PPSAX a Strong Bond Fund Right Now?
Looking for an Investment Grade Bond - Intermediate fund? You may want to consider Principal Spectrum Preferred and Capital Securities Income A (PPSAX - Free Report) as a possible option. PPSAX has a Zacks Mutual Fund Rank of 3 (Hold), which is based on various forecasting factors like size, cost, and past performance.
Objective
PPSAX is one of many Investment Grade Bond - Intermediate funds to pick from. Investment Grade Bond - Intermediate funds focus on the middle part of the curve, generally with bonds that usually mature in more than three years but less than 15 years. Fixed income instruments with this maturity level usually have medium duration risk, but they also compensate investors with a modest yield, at least when compared to their short maturity counterparts. Additionally, the focus on investment grade will make funds here safer, but yields will be lower than in the junk bond category.
History of Fund/Manager
PPSAX is a part of the Principal Financial Group family of funds, a company based out of Des Moines, IA. Since Principal Spectrum Preferred and Capital Securities Income A made its debut in October of 2005, PPSAX has garnered more than $701.51 million in assets. The fund is currently managed by a team of investment professionals.
Performance
Investors naturally seek funds with strong performance. This fund carries a 5-year annualized total return of 2.8%, and is in the bottom third among its category peers. If you're interested in shorter time frames, do not dismiss looking at the fund's 3 -year annualized total return of -0.05%, which places it in the bottom third during this time-frame.
It is important to note that the product's returns may not reflect all its expenses. Any fees not reflected would lower the returns. Total returns do not reflect the fund's [%] sale charge. If sales charges were included, total returns would have been lower.
When looking at a fund's performance, it is also important to note the standard deviation of the returns. The lower the standard deviation, the less volatility the fund experiences. Over the past three years, PPSAX's standard deviation comes in at 7.9%, compared to the category average of 13.79%. The fund's standard deviation over the past 5 years is 9.27% compared to the category average of 14.91%. This makes the fund less volatile than its peers over the past half-decade.
This fund has a beta of 0.13, meaning that it is less volatile than a broad market index of fixed income securities. Taking this into account, PPSAX has a positive alpha of 2.72, which measures performance on a risk-adjusted basis.
Expenses
For investors, taking a closer look at cost-related metrics is key, since costs are increasingly important for mutual fund investing. Competition is heating up in this space, and a lower cost product will likely outperform its otherwise identical counterpart, all things being equal. In terms of fees, PPSAX is a load fund. It has an expense ratio of 1.05% compared to the category average of 0.97%. So, PPSAX is actually more expensive than its peers from a cost perspective.
This fund requires a minimum initial investment of $1,000, and each subsequent investment should be at least $100.
Fees charged by investment advisors have not been taken into considiration. Returns would be less if those were included.
Bottom Line
Overall, Principal Spectrum Preferred and Capital Securities Income A ( PPSAX ) has a neutral Zacks Mutual Fund rank, and in conjunction with its comparatively similar performance, better downside risk, and higher fees, this fund looks like a somewhat average choice for investors right now.
For additional information on the Investment Grade Bond - Intermediate area of the mutual fund world, make sure to check out www.zacks.com/funds/mutual-funds. There, you can see more about the ranking process, and dive even deeper into PPSAX too for additional information. And don't forget, Zacks has all of your needs covered on the equity side too! Make sure to check out Zacks.com for more information on our screening capabilities, Rank, and all our articles as well.